Barkers Baked Goods purchases dog treats from a supplier on February 2 at a quantity of 12,000 treats at $3 per treat. Terms of the purchase are 2/10, n/30. Barkers pays half the amount due in cash on February 28 but cannot pay the remaining balance due in four days. The supplier renegotiates the terms on March 4 and allows Barkers to convert its purchase payment into a short-term note, with an annual interest rate of 6 percent, payable in 9 months. A. Compute the interest expense due when Barkers honors the note. Feedback B. Show the entry to record the payment of the short-term note on December 4. If an amount box does not require an entry, leave it blank. Dec. 4 Short-Term Notes Payable v Interest Expense v Cash

Barkers Baked Goods purchases dog treats from a supplier on February 2 at a quantity of 12,000 treats at $3 per treat. Terms of the purchase are 2/10, n/30. Barkers pays half the amount due in cash on February 28 but cannot pay the remaining balance due in four days. The supplier renegotiates the terms on March 4 and allows Barkers to convert its purchase payment into a short-term note, with an annual interest rate of 6 percent, payable in 9 months. A. Compute the interest expense due when Barkers honors the note. Feedback B. Show the entry to record the payment of the short-term note on December 4. If an amount box does not require an entry, leave it blank. Dec. 4 Short-Term Notes Payable v Interest Expense v Cash

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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